Should AA order more 738s or wait for 737 replacement?

[FrugalFlyerv2.0]

The simple fact is that Lockheed, McD-D, and Fokker don’t make larger commercial transports anymore because they could not produce products which the market wanted. But that argument cannot be made about Airbus.

My major problem with Airbus is that if the market was not interfered with by certain EU governments that just cannot live with the fact that the EU cannot rival the USA, Airbus would have joined Lockheed, McD-D and Fokker in the commercial air transport graveyard. While Airbus was a consortium, they were able to give away their products, which the market (arilines) did not want, but had no choice since 1) it was being given away and 2) the EU carriers were strongly 'encouraged' to purchase Airbus. Boeing unfortunately could not do the same thing to its shareholders that the Airbus consortium did to their EU governments.

In a somewhat similar way, Embraer is giving away its products through the Brazilian government Proex subsidy program. Luckily for Bombardier in that it is based in Quebec and as a results can extort the Canadian government to somewhat subsidize its products.

But Airbus will likely sell more copies of the A330 than any other Boeing model ... ... ...

Lets not get carried away. I think thus far Airbus has sold ~750 A330's. Boeing sold ~1000 B767s. Airbus needs to sell ~250 more A330s in the next 10 or so years to match the B767 units sold by Boeing. On the other hand, B777 sales are nearing ~1000 already. So nice try, but the A330 is not selling like hot cakes.

 

[eolesen]

700UW, you're getting your DC10 accidents confused... There were two DC10 uncontained engine failures that I know of. National Airlines had one on an aircraft that ultimately was bought by AA, and the other was UAL 232. The loss of the #2 engine by itself was survivable. What wasn't survivable was all three hydraulic systems bleeding out like a field dressed deer.

That's clearly an airframe design flaw, and why people hold McDD responsible for that hull loss, just as they were responsible for the THY crash in Ermenonville, France due to an explosive decompression that collapsed the cabin floor and severed the flight control cables to the tail... And even the forklift incident with AA 191 should have been survivable had it just been the loss of the engine & pylon. But when the hydraulics were ripped out and the slats retracted, it became unsurvivable. Unlike other contemporary designs, the DC10 didn't have locking devices to prevent an uncommanded retraction.

No aircraft design is perfect, but some are definitely safer than others.

 

[WorldTraveler]

Airbus has a backlog of orders in addition to delivered 330s that exceeds 1100 now including 750 currently in service (5 of which are freighters).

I don't doubt that some of the gov't interference/subsidy issues are genuine but that is global aerospace manufacturing. The EU will also argue that Boeing gets gov't subsidies through the inflated prices it charges for its military products and given that the US is by far the largest producer of military hardware, there might be some truth to that...

but that doesn't change the fact that Airbus has become a major force in global aerospace, they do build products that airlines around the world are buying as fast or faster than Boeings, and those places do continue to stay in service at least for acceptable periods based on the agreements Airbus has made w/ those airlines.

It is also true that Airbus is just as hungry to place its products with US airlines and will be particularly interested in UA and DL who have products from both mfrs. By the same token, it is a given that Airbus would run as fast as possible to Ft. Worth if AA indicated in the slightest that they were interested in some of A's products - and likely would aggressively fight for AA's business.

Whether that would be good for America is another discussion in my mind; given that Boeing and Airbus have far more resources and friends in high places than the US airlines, I say let the airlines make their decisions based on what is best for them and let the A, B, and their gov'ts figure it all out.

 

[BoeingBoy]

And even the forklift incident with AA 191 should have been survivable had it just been the loss of the engine & pylon. But when the hydraulics were ripped out and the slats retracted, it became unsurvivable. Unlike other contemporary designs, the DC10 didn't have locking devices to prevent an uncommanded retraction.

There was one other link in that chain. At the time AA trained their pilots to make the initial climb at V[sub]2[/sub] following an engine failure - if they were above that to increase pitch to achieve the proper speed. Which is what the pilots did that day. The leading edges retracted when hydraulic pressure dropped and the plane the plane slowed to V[sub]2[/sub] then the left wing stalled.

I don't know if there's any video remaining of the crash, but I remember how the aircraft climbed with wings level to a few hundred feet before rolling left. Once what happened was known, AA redid their training to maintain speed unless above V[sub]2[/sub]+10 on initial climb with an engine out.

Jim

 

[FWAAA]

With my genteel Southern upbringing I just think it bad taste that they continue accepting bonusses while revealing at the same time that we are the only major still losing money. Bonusses are for exceptional performance, period, end of discussion. And, that must be positive exceptional performance. Bonusses should not be awarded when the exception is "the largest quarterly loss in the company's history" kind of "exceptional" performance.

Not only do I agree with your view, but the AMR board of directors agrees with your view that the executives should not receive any bonus while the company is suffering huge losses. That's why AMR has not paid any bonuses to the executives for over 10 years.

The board has retained the variable performance share plan and other variable compensation programs designed to tie the annual pay of the execs to the relative performance of AMR stock compared to its competitors. Over the past decade, says AMR, the executives have received only about 65% of their targeted pay. Given the magnitude of the losses and the long duration of the losses, perhaps the execs should not have received that much, but at least their apparent concessions (35% of their pay over the past decade) look somewhat equivalent to the concessions suffered by the rank and file.

AMR stock's performance over the past three years relative to its competitors looks to be somewhat dismal, so the payouts this April under the PSP will be very small compared to the potential payouts had AMR outperformed. Looks like the compensation committee's efforts to tie pay to performance has sorta worked.

 

[Mr Red]

Not only do I agree with your view, but the AMR board of directors agrees with your view that the executives should not receive any bonus while the company is suffering huge losses. That's why AMR has not paid any bonuses to the executives for over 10 years.

The board has retained the variable performance share plan and other variable compensation programs designed to tie the annual pay of the execs to the relative performance of AMR stock compared to its competitors. Over the past decade, says AMR, the executives have received only about 65% of their targeted pay. Given the magnitude of the losses and the long duration of the losses, perhaps the execs should not have received that much, but at least their apparent concessions (35% of their pay over the past decade) look somewhat equivalent to the concessions suffered by the rank and file.

AMR stock's performance over the past three years relative to its competitors looks to be somewhat dismal, so the payouts this April under the PSP will be very small compared to the potential payouts had AMR outperformed. Looks like the compensation committee's efforts to tie pay to performance has sorta worked.

Oh I get it,I want 75.00 per hr. tied to stock performance. No performance I settle for 50.00 contract settled I'm sure center pork can understand that !!!

 

[WorldTraveler]

Not only do I agree with your view, but the AMR board of directors agrees with your view that the executives should not receive any bonus while the company is suffering huge losses. That's why AMR has not paid any bonuses to the executives for over 10 years.

The board has retained the variable performance share plan and other variable compensation programs designed to tie the annual pay of the execs to the relative performance of AMR stock compared to its competitors. Over the past decade, says AMR, the executives have received only about 65% of their targeted pay. Given the magnitude of the losses and the long duration of the losses, perhaps the execs should not have received that much, but at least their apparent concessions (35% of their pay over the past decade) look somewhat equivalent to the concessions suffered by the rank and file.

AMR stock's performance over the past three years relative to its competitors looks to be somewhat dismal, so the payouts this April under the PSP will be very small compared to the potential payouts had AMR outperformed. Looks like the compensation committee's efforts to tie pay to performance has sorta worked.

good, honest post, FWAAA.

To compare stock prices of the 3 largest US airlines AMR has increased by about 60%, DAL has about doubled over the past 2 years, and UAL by about 275% - obviously buoyed by the CO acquisition.

DAL 8.72B
UAL 6.88
AMR 2.16

LUV 8.6
ALK 2.1

LCC (US) 1.33

Note also that the US airlines have unwound between 10-20% of their value over the past week as oil prices soared over problems in the Middle East. It isn't an exaggeration at all to say that if the 2011 summer season goes down the toilet as capacity is pulled but costs go up because of higher oil prices, there will be airlines in significant financial trouble by the winter.
If the problems in the middle east and the accompanying oil problems persist beyond Easter, it is doubtful that any US airlines can make money in 2011.

 

[FWAAA]

Oh I get it,I want 75.00 per hr. tied to stock performance. No performance I settle for 50.00 contract settled I'm sure center pork can understand that !!!

Make sure you tell your negotiators so that they can bargain for that deal on your behalf.